Investment funds in the Cayman Islands is a rather topical issue for many professional investors, since over time they need to open an investment fund.
The consequence of this is the question of where such a fund will be opened. Statistics show that the choice of a country depends on many conditions. But most of the creation takes place in the Cayman Islands.
WORK OF FUNDS ON THE ISLANDS
CIMA is a government body that exercises the functions of regulating finances in the Caymans. It is he who provides the licensing of funds and their opening.
Licensing is controlled through the Law on Mutual Funds. He establishes the concept of mutual investment.
Shares include institutions registered on or outside the islands when managed from the islands. They should provide the possibility of equity participation in order to sum up deposits, share risks and make a profit.
On the territory of the Cayman can register many types of funds.
LEGAL BASIS OF FUNDS ON THE ISLANDS
According to the legal structure, funds can be divided into several types:
- An exempted company is the most common type of fund. He is exempt from paying taxes. It features an accelerated and inexpensive registration procedure and has a flexible internal structure.
- Split Portfolio Company (SPC) – has the ability to distribute shares to several legal companies, but it will be considered one legal entity. This form provides better protection and asset control.
- Limited Liability Company (ELP) – in this form, the fund’s general director controls all assets and makes transactions on his own, or with the help of third parties acting on his behalf.
- Equity trust is based on joint management of common investments. Each participant acquires a share that they have the right to sell or redeem. This cooperation is very similar to a joint stock company.
REGULATED MUTUAL INVESTMENT FUNDS ON THE CAYMAN ISLANDS AND THEIR TYPES
These funds in the Cayman are divided into several types:
- Funds with a license. They are controlled by the Law on Mutual Funds, section 4, paragraph 1a. Such a fund may apply to the regulatory body for a license. However, the requirements for such a company are quite inconvenient. Therefore, they rarely go for a license.
- Funds with administration appoint a manager and an auditor. Also, this fund should have an office on the islands. They provide annual reporting to the regulatory body. Administrators themselves do not have a share in the fund. They only process data.
- Registered companies have restrictions on the initial investment contribution. They require mandatory registration and provide copies of all investment partners. In this type of fund, an administrator is appointed.
- Master Fund. A fund with such a structure is registered without fail. A correctly completed application along with accompanying documents are submitted to the registration authority, after which a mandatory fee is paid.
NON-REGULATED INVESTMENT FUNDS ON THE CAYMAN ISLANDS AND THEIR TYPES
Not all funds are required to register. There are species exempted from this. These include:
- The fund is exempted from registration if about 15 investors participate in the stake, most of which have the right to appoint a director or remove him from his post.
- Funds are exempted without the stipulated share buyback procedure or buyback freezing for a period of 5 years or more.
Manage the organization with a minimum number of directors – two. They are obliged to carry out annual registration and have the right to regulate the goals and objectives of the fund.
A trustee, administrator and manager can also be appointed. These positions are not among the mandatory, however, most of the company appoint them, as this greatly facilitates the opening of the fund, bank accounts and the activities of the organization as a whole.
MUTUAL FUND REGISTRATION TERMS
The terms, as well as the cost of the fund, are individual. This is due to the large number of types of structure, goals and services.
To determine the approximate dates, an understanding of the initial goals of the funds is required. The acquisition of a license on the islands itself can drag on for a period of three months to a year. It depends on the type of fund and the availability of qualified and registered employees.
Our company is based on experience with this sphere and Eternity Law International specialists will be happy to рrovide you with assistance in resolving this issue.